Bangladesh Secures Soft Chinese Financing to Expand Mongla Port Capacity

Bangladesh has taken a significant step toward strengthening its maritime infrastructure by securing concessional financing from China to modernise and expand Mongla Port. The agreement, finalised on 10 October 2026, provides the equivalent of $335.78 million—roughly Tk 3,593 crore or RMB 2.404 billion—from the Export-Import Bank of China. The funds are earmarked exclusively for the project titled "Expansion and Modernisation of Mongla Port Facilities."

Under the terms of the loan, the interest rate is set at a concessional 2 percent per year. The repayment period spans 20 years, which includes a five-year grace period during which no principal repayments are required. This structure is designed to reduce the immediate fiscal burden on the government while allowing the port development work to proceed. The loan documents were signed in Dhaka by Alia Meher, Joint Secretary of the Economic Relations Division on the Bangladesh side, and Fengjun Tian, Assistant General Manager of China EXIM Bank.

The Mongla Port Authority, operating under the Ministry of Shipping, will implement the project. Once completed, the port is expected to feature two new container terminals equipped with contemporary cargo-handling machinery. Additional components include a dedicated container yard, a container delivery yard, and a separate cargo-handling yard, together with other necessary upgrades to improve operational efficiency and increase overall handling capacity.

Mongla, located in the southwestern part of the country on the banks of the Pasur River, serves as Bangladesh's second-largest seaport after Chattogram. For years it has functioned as an important alternative gateway for trade, particularly for cargo moving to and from the southwestern and southern regions. However, limited container-handling capacity and aging facilities have constrained its ability to absorb a larger share of the country's growing trade volumes. Expanding the port is therefore seen as a practical way to ease congestion at Chattogram, shorten transit times for certain cargoes, and support regional economic activity.

Improved infrastructure at Mongla could also benefit exporters and importers by offering more competitive logistics options and reducing reliance on a single major port. Better container and cargo facilities may encourage greater use of the port by shipping lines, potentially lowering costs for businesses and supporting employment in related sectors such as trucking, warehousing, and port services. In the longer term, a stronger Mongla Port could contribute to more balanced economic development beyond the traditional Dhaka-Chattogram corridor.

The decision to use concessional external financing reflects the government's approach to funding large infrastructure projects without placing excessive pressure on domestic resources or higher-cost commercial borrowing. By spreading repayments over two decades at a low interest rate, the arrangement aims to keep the project financially viable while delivering lasting improvements in port capacity.

The signing of the loan agreement marks the formal start of the financing phase for the modernisation effort. Implementation will now depend on detailed design work, procurement processes, and construction timelines under the Mongla Port Authority. If carried out as planned, the upgrades are expected to enhance Bangladesh's overall maritime logistics capacity and provide a more resilient framework for handling future growth in international trade.